Data centers to test limits of grid and growth
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Equinix Data Center in Ashburn, Virginia. Photo: Amanda Andrade-Rhoades for the Washington Post via Getty Images
Pittsburgh is vying to stake its claim in the expanding Midwest tech corridor by ramping up data center growth.
Why it matters: As data centers proliferate to meet growing AI demands, a surge in digital infrastructure raises serious questions about energy, water and long-term economic impact.
Driving the news: A wave of data center power plant projects is hitting southwestern Pennsylvania, led by a $10 billion campus at the former Homer City coal plant.
- A Pittsburgh coalition is pushing to make the region an AI leader by expanding funding, infrastructure, secure defense tech sites and private investment.
State of play: Most states, including Pennsylvania, have some tax incentives to lure data centers, and the projects often receive millions in state grants.
- Access to water, available industrial land and abundant natural gas make places like Pittsburgh appealing to companies, says Jon Davis of The Council of State Governments.
What they're saying: "Data centers are creating significant business ecosystems around them," Dan Diorio, senior director of state policy for the Data Center Coalition, tells Axios.
Yes, but: Data center expansions often happen behind closed doors, with local governments signing NDAs with tech firms, limiting public knowledge of energy and water use, says Helena Volzer of the nonprofit Alliance for the Great Lakes.
- Growing data center and EV demand, plus aging plant closures and clean energy delays, could further strain Pennsylvania's power grid.
By the numbers: Data centers used 4.4% of U.S. electricity in 2023 and could consume up to 12% by 2028, per the Department of Energy.
- Fewer than one-third of data centers track water consumption, according to a 2021 study.
- Hyperscale data centers with 5,000+ servers can use as much water each year as 12,000 Americans, per the Alliance for the Great Lakes.
Friction point: Data centers require large investments but create relatively few permanent jobs, per a 2023 Virginia report that found most economic benefits happen during construction and decline afterward.
The other side: A recent Data Center Coalition report touts the economic benefits of data centers beyond the jobs inside them, including boosting local supply chains, employee spending, and tax revenue.
- Data center jobs in Pennsylvania grew over 48% from 2018 to 2024, reaching 13,452 in early 2024, per the U.S. Census Bureau. The report notes the data center industry supported 154,000 direct, indirect and cross-state jobs in Pennsylvania.
Case in point: The soon-to-be-converted Homer City coal plant will become the state's top power producer and promises 1,000 permanent jobs.
- New cooling tech, water recycling and even small nuclear reactors could reshape water and energy use in the future.
Still, Pennsylvania trails states like Ohio, Illinois, Virginia and New York in data center buildout.
What we're watching: The Pennsylvania Public Utility Commission will hold a public hearing on April 24 to address the impact of data centers and other large power users on the state's power grid.